According to information known about the IPO, Lianyirong Technology Group (hereinafter referred to as “Lianyirong”) was officially listed on the main board of the Hong Kong Stock Exchange under the stock code “9959” on April 9, becoming the first listed supply chain fintech SaaS company in China.

In this offering, Lianyirong is very popular among investors. Among themThe portion of the Hong Kong public offering received 98.46Oversubscribed by 2 times, the international placement portion received 14.83Double oversubscription, the issue price was HK$17.58 per share.

As of 10:10, Lianyi Finance was reported at HK$19.160 per share, up 8.99% from the issue price, and its market capitalization was approximately HK$43.4 billion.

As a leading supplier of supply chain fintech solutions in China, Lianyirong has chosen to empower small and medium-sized enterprises through technological means since its inception, and to serve core enterprises and their supply chain ecosystem with innovative online, digital, scenario, and automated business models. Song Qun, founder, chairman and CEO of Lianyirong, said, “Today, Lianyirong is officially listed on the main board of the Hong Kong Stock Exchange. This is an important milestone in the company's development process and marks Lianyirong's official entry into the international capital market. Lianyirong has always been committed to redefining and transforming supply chain finance through technology and innovation, and insists on using technology to serve the real economy. Based on a new starting point, we will continue to stick to our original intentions, provide customers and partners with more efficient, more reliable and more intelligent supply chain fintech solutions, and create outstanding value for the new supply chain finance ecosystem.”

It is worth noting that,BlackRock (BlackRock), Fidelity International (Fidelity), Janus Henderson Fund, Ontario Teacher Pension Plan (OTPP), Sequoia (Sequoia), and Singapore Economic Development Board (EDB Investment)A total of 6 star institutional investors participated in the IPO cornerstone.

Since its establishment in 2016, Lianyirong has successively received support from more than 10 domestic and foreign first-line financial investors and strategic investors, including Tencent, CITIC Capital, Zhengxin Valley Capital, China Merchants Venture Capital, BAI Capital, GIC, Prologis, Skyworth, Oceanwide Investment, Weiguang Venture Capital, and Standard Chartered Bank.

Before the IPO,Tencent holds 18.89% of Lianyirong's shares, making it the largest institutional investorCITIC Capital and Zhengxin Valley Capital hold 12.03% and 11.92% of the shares, respectively. Additionally, GIC, Standard Chartered, BAI Capital, and China Merchants Venture Capital held 9.20%, 3.61%, 3.60%, and 3.04% of the shares, respectively.

Lin Lijun, partner of Zhengxin Valley Capital, said, “In 2016, Mr. Song Qun resigned from China Resources Bank to establish Lianyirong. We are very optimistic about his perception, mentality, and character, so when the business plan was just an A4 sheet, we actively invested and continued to expand for 4 rounds. It is the institution that has participated in the most rounds; we are also highly appreciative of the company's innovative ability and business model. Today, Lianyirong has begun a new journey. We believe,Facing the rapid development of the supply chain market in the future, Lianyi Finance can bring more surprises and social progressto make the world a better place.”

Long Yu, founding and managing partner of BAI Capital, said:”Lianyirong is the first company to turn China's fintech SaaS into a real proposition. It uses new technologies such as AI, big data, and blockchain to help supply chain finance effectively solve the huge problem of expensive and difficult financing for small and medium-sized enterprises, and ensures that financial risks are generally manageable, improving the efficiency of capital operation for the whole society. We are very honored to be with the management team headed by Mr. Song. Starting with round B, we have added positions many times, and have seen Lianyi Rong grow into a pioneer, pioneer and leader in the industry along the way. The listing is a new starting point for the company, and we look forward to and firmly believe that Lianyirong will become a world-class supply chain fintech company.”

Looking specifically at Lianyirong's business model, it mainly provides efficient and reliable supply chain fintech solutions for core enterprises (larger enterprises with high credit in the supply chain) and financial institution customers, and enhances transparency and connectivity in the entire supply chain finance ecosystem, so as to digitize the entire supply chain finance workflow.

Among them, Lianyirong's technology solutions help core enterprises and financial institutions efficiently verify the authenticity of supply chain transactions, promote multi-party collaboration within the supply chain finance ecosystem, effectively manage operational risks, and achieve integrated supply chain management.

Furthermore, Lianyilong also uses blockchain technology to reshape transactions and payment processes in the supply chain to create an immutable and traceable digital certificate Digipo for accounts receivable that suppliers should obtain from core enterprises; while suppliers can split Digipo, pay in full or in part to their upstream suppliers, or use it to obtain financing from financial institutions.

Lianyirong's cloud solution, on the other hand, supports a plug-and-play model, which allows users to seamlessly connect and use its technology solutions without reconfiguration or adjustments. It can also provide customers with extensive needs for customization, automation, and operational efficiency with customized solutions that are deeply integrated with their internal systems and can be output in a white label manner.

According to data from Insight Consulting, the total expenditure of core enterprises and financial institutions in the supply chain finance sector for technology solutions is expected to increase from 43.4 billion yuan in 2019 to 164.2 billion yuan in 2024, with a compound annual growth rate of 30.5%. Since its establishment in 2016,Lianyirong has served more than 340 core enterprises, including more than 25% of China's top 100 enterprises, and has cooperated with more than 200 financial institutions. As of December 31, 2020, Lianyilong has helped clients and partners process over RMB 280 billion in supply chain finance transactions in China.

In 2020, Lianyirong processed 163.8 billion yuan of supply chain financial transactions, ranking first among supply chain fintech solution providers in China, with a market share of 20.6%.

In terms of financial data. In 2018, 2019, and 2020, Lianyirong's revenue was 383 million yuan, 700 million yuan, and 1,029 million yuan, respectively.

It is worth noting that while the scale of its business continues to expand, Lianyirong's profitability also continues to increase.In 2020, Lianyirong's adjusted net profit was 192.5 million yuan, far higher than 36.5 million yuan in 2019.

Judging from the revenue structure, Lianyi Finance mainly charges service fees for technology solutions based on transaction volume.

One point that needs to be emphasized here is,Lianyirong's SaaS model provides customers with lower usage costs, so they don't have to build infrastructure and technical architectures from scratch, thus saving high upfront costs and investment.

According to Insight Consulting's data, independent development of supply chain finance systems with AI and big data technology capabilities usually requires an upfront cost of 30 million yuan to 40 million yuan, as well as annual maintenance and upgrade costs of 5 million yuan to 15 million yuan, while Lianyirong usually does not charge or only charges limited upfront fees, which are generally within 5 million yuan.

This means that Lianyirong needs to maintain strong stickiness with customers in order to continuously increase its revenue scale.

In 2019 and 2020, the net customer expansion rates of Lianyirong's supply chain fintech solutions were about 125% and 112%, respectively, maintaining a high level; in 2020, Lianyirong's supply chain fintech solution customer retention rate reached 99%.

In addition, Lianyirong also cooperates with leading global software vendors and B2B platforms such as INFOR, PrimeEvent, and ONE Network Enterprises to expand overseas markets and develop international business.

Lianyirong stated in its prospectus that the capital raised from the IPO will be mainly used to: improve technology solutions, enhance software development capabilities, and attract and retain top technology talents; enhance technology infrastructure and IT operation management and maintenance; expand cross-border business; enhance capabilities in sales and marketing, business development and brand building; seek strategic investment and acquisition opportunities; and use working capital and other general corporate purposes.